    [Senate Hearing 116-296]
    [From the U.S. Government Publishing Office]

                                                            S. Hrg. 116-296

                      AN EXAMINATION OF THE DEPARTMENT OF
        ENERGY'S CARBON CAPTURE, UTILIZATION, AND STORAGE PROGRAMS AND
         TESTIMONY ON S. 1201, THE ENHANCING FOSSIL FUEL ENERGY CARBON
                             TECHNOLOGY ACT OF 2019

    =======================================================================

                                    HEARING

                                   BEFORE THE

                                  COMMITTEE ON
                          ENERGY AND NATURAL RESOURCES
                              UNITED STATES SENATE

                         ONE HUNDRED SIXTEENTH CONGRESS

                                 FIRST SESSION

                                   __________

                                  MAY 16, 2019

                                   __________

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

                           Printed for the use of the
                   Committee on Energy and Natural Resources

            Available via the World Wide Web: http://www.govinfo.gov
                                 _________

                     U.S. GOVERNMENT PUBLISHING OFFICE

    37-308                   WASHINGTON : 2020

                   COMMITTEE ON ENERGY AND NATURAL RESOURCES

                        LISA MURKOWSKI, Alaska, Chairman
    JOHN BARRASSO, Wyoming               JOE MANCHIN III, West Virginia
    JAMES E. RISCH, Idaho                RON WYDEN, Oregon
    MIKE LEE, Utah                       MARIA CANTWELL, Washington
    STEVE DAINES, Montana                BERNARD SANDERS, Vermont
    BILL CASSIDY, Louisiana              DEBBIE STABENOW, Michigan
    CORY GARDNER, Colorado               MARTIN HEINRICH, New Mexico
    CINDY HYDE-SMITH, Mississippi        MAZIE K. HIRONO, Hawaii
    MARTHA McSALLY, Arizona              ANGUS S. KING, JR., Maine
    LAMAR ALEXANDER, Tennessee           CATHERINE CORTEZ MASTO, Nevada
    JOHN HOEVEN, North Dakota

                          Brian Hughes, Staff Director
                         Kellie Donnelly, Chief Counsel
                          Jed Dearborn, Senior Counsel
                    Sarah Venuto, Democratic Staff Director
                    Sam E. Fowler, Democratic Chief Counsel
                          Renae Black, General Counsel

                                C O N T E N T S

                                  ----------

                               OPENING STATEMENTS

                                                                       Page
    Murkowski, Hon. Lisa, Chairman and a U.S. Senator from Alaska....     1
    Manchin III, Hon. Joe, Ranking Member and a U.S. Senator from
      West Virginia..................................................     3
    Hoeven, Hon. John, a U.S. Senator from North Dakota..............    13

                                   WITNESSES

    Winberg, Hon. Steven E., Assistant Secretary for Fossil Energy,
      U.S. Department of Energy......................................    14
    Friedmann, Dr. S. Julio, Senior Research Scholar, Center on
      Global Energy Policy, Columbia University School of
      International & Public Affairs.................................    21
    Goff, Adam, Principal, 8 Rivers Capital, LLC.....................    29
    Harju, John, Vice President for Strategic Partnerships,
      University of North Dakota Energy & Environmental Research
      Center.........................................................    38
    Jackson, Richard, President, Low Carbon Ventures, Occidental
      Petroleum......................................................    45
    Lagano, Judith, Senior Vice President of Asset Management, NRG
      Energy, Inc....................................................    51

              ALPHABETICAL LISTING AND APPENDIX MATERIAL SUBMITTED

    BPC Action:
        Statement for the Record.....................................    12
    Carbon Capture Coalition:
        Statement for the Record.....................................    10
    Carbon Utilization Research Council:
        Letter for the Record........................................     5
    Clean Air Task Force:
        Statement for the Record.....................................    11
    Enviva Holdings, LP:
        Letter for the Record........................................   122
    Friedmann, Dr. S. Julio:
        Opening Statement............................................    21
        Written Testimony............................................    23
        Responses to Questions for the Record........................    89
    Goff, Adam:
        Opening Statement............................................    29
        Written Testimony............................................    31
        Responses to Questions for the Record........................    96
    Harju, John:
        Opening Statement............................................    38
        Written Testimony............................................    41
        Responses to Questions for the Record........................   100
    Hoeven, Hon. John:
        Opening Statement............................................    13
    International Brotherhood of Boilermakers, Iron Ship Builders,
      Blacksmiths, Forgers & Helpers:
        Letter for the Record........................................     8
    Jackson, Richard:
        Opening Statement............................................    45
        Written Testimony............................................    47
        Responses to Questions for the Record........................   105
    King, Jr., Hon. Angus S.:
        Chart titled ``Ice-core data before 1958. Mauna Loa data
          after 1958.'' -- dated 5/11/19.............................    62
        Chart titled ``Composite Antarctic CO2 record (0-
          800 kyr before present) with current Mauna Loa readings''..    64
    Lagano, Judith:
        Opening Statement............................................    51
        Written Testimony............................................    53
        Responses to Questions for the Record........................   111
    LTC Action:
        Statement for the Record.....................................   151
    Manchin III, Hon. Joe:
        Opening Statement............................................     3
    Murkowski, Hon. Lisa:
        Opening Statement............................................     1
    National Wildlife Federation:
        Letter for the Record........................................   154
    (The) Nature Conservancy:
        Letter for the Record........................................     7
    Winberg, Hon. Steven E.:
        Opening Statement............................................    14
        Written Testimony............................................    16
        Responses to Questions for the Record........................    82

         AN EXAMINATION OF THE DEPARTMENT OF ENERGY'S CARBON CAPTURE,
        UTILIZATION, AND STORAGE PROGRAMS AND TESTIMONY ON S. 1201, THE
           ENHANCING FOSSIL FUEL ENERGY CARBON TECHNOLOGY ACT OF 2019

                                  ----------

                             THURSDAY, MAY 16, 2019

                                           U.S. Senate,
                     Committee on Energy and Natural Resources,
                                                        Washington, DC.
        The Committee met, pursuant to notice, at 10:01 a.m. in
    Room SD-366, Dirksen Senate Office Building, Hon. Lisa
    Murkowski, Chairman of the Committee, presiding.

               OPENING STATEMENT OF HON. LISA MURKOWSKI,
                        U.S. SENATOR FROM ALASKA

        The Chairman. Good morning, everyone. The Committee will
    come to order.
        We have a full slate of witnesses this morning, so I want
    to get started here. We are beginning a hearing this morning on
    DOE's carbon capture, utilization, and storage programs, or
    CCUS. We are also considering S. 1201, the Enhancing Fossil
    Fuel Energy Carbon Technology Act, or the EFFECT, Act.
        Senator Manchin, I have already given you great credit for
    coming up with great acronyms. EFFECT is pretty good. We
    appreciate that. I am proud to cosponsor it.
        Senator Manchin. I am proud to have you.
        [Laughter.]
        The Chairman. This hearing is part of our Committee's
    ongoing discussion on clean energy innovation to address our
    changing climate.
        In March, the Committee examined the impact of climate
    change in the electricity sector, and in both February and
    April we discussed opportunities for energy innovation. In
    those hearings and others, our witnesses made clear to us that
    significant reductions in greenhouse gas emissions will be a
    major undertaking that will require an all-of-the-above
    approach.
        We are working on that approach now because we can see it.
    We can feel it. Climate change is with us every day, whether we
    like it or not, and whether or not we use the words climate
    change, it is there. Come to Alaska, I will show you
    diminishing sea ice, melting permafrost, more frequent extreme
    weather events, and rising sea levels. We are warming in the
    State of Alaska at twice the rate of the Lower 48, and many
    villages are threatened by coastal erosion, with some needing
    out-and-out relocation. Our Committee recognizes the threat of
    climate change, so we have been hard at work on practical,
    bipartisan solutions to increase deployment of clean and
    innovative energy technologies.
        In March, I introduced the Nuclear Energy Leadership Act
    along with 17 of my colleagues. And then earlier this week, we
    heard my American Mineral Security Act, and Senator Manchin's
    Rare Earth Element Advanced Coal Technologies, or REEACT. Both
    of these bills will help the U.S. rebuild its supply chain for
    clean energy technologies like electric vehicles (EVs), solar
    panels, and more.
        The bill that we are here to consider today, the EFFECT
    Act, focuses on increased deployment of carbon capture,
    utilization, and storage technology, again referred to as CCUS.
    It is a natural complement to our work last Congress to expand
    the 45Q tax credit and it presents a tremendous opportunity to
    reduce our emissions while maintaining the availability of
    reliable electricity generation resources. Our bipartisan bill
    will help us seize that opportunity by expanding and
    modernizing DOE's research and development programs in this
    field.
        We are seeing that CCUS technology can work. There are 18
    large-scale facilities in commercial operation around the world
    that are already capturing and storing tens of millions of tons
    of carbon dioxide per year. Here in the U.S., NRG's Petra Nova
    project, located onsite at a coal-fired power plant, has an
    annual carbon dioxide capture capacity of 1.4 million tons.
    That is equivalent to removing the daily emissions from 350,000
    cars.
        There are many other promising projects in development.
    Project Tundra, a proposed project at a coal-fired power plant
    in North Dakota, aims to store up to 3.6 million tons of carbon
    dioxide per year. And the NET Power facility in development
    near Houston will utilize a process called the Allam Cycle to
    produce electricity from natural gas using zero carbon
    emissions. These are just a few examples of projects around the
    globe. In order for CCUS to have any meaningful impact on
    global emissions, however, many more of these facilities need
    to be deployed.
        So today we are going to examine the state of CCUS
    technologies, the challenges of greater deployment, and how the
    Federal Government can be an effective partner to bring these
    technologies to market.
        We have a very distinguished panel before us today. We have
    Assistant Secretary Steven Winberg from the Department of
    Energy (DOE). We have Dr. Julio Friedmann, who is a Senior
    Research Scholar at the Center for Global Energy Policy at
    Columbia University; Mr. Adam Goff is the Principal and Policy
    Director at 8 Rivers Capital; Mr. John Harju is the Vice
    President for Strategic Partnerships at the University of North
    Dakota's Energy and Environmental Research Center; Mr. Richard
    Jackson is a Senior VP for Operations Support at Occidental
    Petroleum Company; and Mrs. Judith Lagano, who is the Senior
    Vice President for Asset Management at NRG Energy.
        So we have a great panel assembled for us this morning, and
    I am looking forward to hearing from them. But before we do, I
    will turn to my colleague and friend, Senator Manchin, for your
    comments.

                  STATEMENT OF HON. JOE MANCHIN III,
                    U.S. SENATOR FROM WEST VIRGINIA

        Senator Manchin. Thank you, Chairman Murkowski, and thank
    you so much for the gathering today to discuss carbon capture,
    utilization, and sequestration and the Enhancing Fossil Fuel
    Energy Carbon Technology, or the EFFECT Act.
        The Chairman. Gotta love it.
        Senator Manchin. I love it. It sounds good. We have to make
    it work now.
        I thank all of you for coming here and sharing your
    expertise with us, and we look forward to the hearing and hope
    you are going to have comprehensive answers to some of these
    difficult questions and challenges that we have.
        Earlier this year, Dr. Birol, of the non-partisan
    International Energy Agency, the IEA, told this Committee that
    CCUS should be the most critical technology in which we can
    invest. Likewise, in the models run by the U.N.
    Intergovernmental Panel on Climate Change for Stabilizing
    Emissions by 2050, many projected the need for carbon capture
    to achieve the below-two-degree-Celsius goal. The models
    without carbon capture show climate mitigation costs rising by
    138 percent.
        I really do think there is bipartisan agreement in Congress
    about the role CCUS will need to play in lowering the world's
    carbon emissions; but we have to put our money where our mouth
    is and enact strong policies that will help commercialize these
    technologies in the very near term. That is why I introduced
    the EFFECT Act last month with my dear friend, Chairman
    Murkowski, and a bipartisan group of Senators. It is a
    comprehensive bill that is aimed at enhancing research and
    development and, just as importantly, demonstration and
    deployment for each aspect of CCUS. That includes coal, natural
    gas technologies, utilization, storage, and even atmospheric
    CO2 removal.
        As we say in West Virginia, everything but the squeal. Have
    you all heard that saying? When you butcher the pig back home,
    I think in the hills of West Virginia, we eat everything but
    the squeal. Okay.
        Now let's take a step back and take a look at the global
    picture. The IEA recently issued a report showing energy
    consumption around the world grew by 2.3 percent in 2018, with
    fossil fuels meeting nearly 70 percent of that increased
    demand. The average age of a Chinese coal plant is 12 years.
    They are going to be running those plants for years to come
    whether we like it or not. That is backed up by predictions
    that under current policies, 51 percent of China's power and 57
    percent of India's power could come from coal in the next 20 to
    30 years.
        So if we acknowledge that fossil fuels are going to be part
    of the global energy mix--and we do call this the global
    climate, not the North American climate--for decades to come,
    then we need to figure out how to use them in the cleanest way
    we can.
        It is a fact that our country has the greatest resource of
    all, brilliant researchers and entrepreneurs. Let's give them
    the direction and the funding to do what they do best, because
    if we can lead in the CCUS space, then we can do a number of
    incredibly important things. First, we could maintain our
    affordable and reliable domestic energy supply. Second, we
    could export these technologies to those countries who show no
    sign of cutting off their use of fossil fuels and enable them
    to cut down on their emissions. Third, we can boost our economy
    with the utilization of CO2, something previously
    valueless, either for enhanced oil recovery (EOR) as we're
    seeing now or for use in cement products, fuel, or any number
    of industrial settings.
        Senator King has a good idea. It is a major bottling
    facility, and they use all the CO2 for the fizz.
        If we are thinking pragmatically, there should be no
    downside to supporting and accelerating CCUS deployment on a
    large scale, no matter where you are coming from on the
    political spectrum.
        I would also like to briefly touch on one aspect of the
    EFFECT Act that is unrelated to coal or natural gas, and that
    is carbon removal.
        Taking CO2 right out of the air is something
    that former Energy Secretary Ernie Moniz and other luminaries
    are looking at, as are oil companies like Occidental Petroleum,
    who we will hear from today. And we thank you for that.
        As I have said, we need to think of all the ways to skin
    this cat of that problem called climate change and aggressively
    pursue the options that can realistically help us meet our
    goal, and removing CO2 directly from the ambient air
    is one of those things. It can be something as technologically
    complex as direct air capture or something as simple as
    afforestation. This includes the RD&D program for large-scale
    atmospheric removal of CO2 which is the necessary
    companion to the RD&D for coal and natural gas technologies.
        It will round out the full suite of technologies needed in
    the carbon capture space. This is the moonshot, and we need to
    get behind it and do it now.
        We have a wide-ranging panel of witnesses before us today
    who can discuss CCUS from every perspective. I look forward to
    getting a status update and outlook from you all and hearing
    your feedback on the EFFECT Act, if you had a chance to look at
    it.
        Before I turn back to you, Madam Chairman, I would like to
    enter these letters and statements of support for the EFFECT
    Act into the record from the Carbon Utilization Research
    Council, The Nature Conservancy, the International Brotherhood
    of Boilermakers, the Carbon Capture Coalition, the Clean Air
    Task Force and BPC Action.
        Thank you, Madam Chair.
        The Chairman. They will be included as part of the record.
        [The information referred to follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        The Chairman. Thank you, Senator.
        Senator Hoeven, I understand you would like to do a little
    bit further introduction of Mr. Harju?

                    STATEMENT OF HON. JOHN HOEVEN,
                     U.S. SENATOR FROM NORTH DAKOTA

        Senator Hoeven. I would, thank you, Madam Chairman and
    Ranking Member Manchin. I appreciate that very much.
        I know him extremely well and he is a great guy, so I could
    just brag on him without reading my notes, but then he has all
    these amazing accomplishments and they are way above my head so
    I have to read that part because otherwise I would totally
    screw it up. So I am going to read for a while. But he is a
    good friend. He is a good friend.
        [Laughter.]
        And he is really, really smart, Joe, you know, a smart guy.
        Senator Manchin. John, we have all the smart ones here
    today.
        Senator Hoeven. Yes, they look like it.
        So again, thanks to both of you and I do appreciate the
    opportunity to talk a little bit about John Harju.
        He is a University of North Dakota graduate, Vice President
    for Strategic Partnerships at the EERC, which is the Energy and
    Environmental Research Center. I think, Madam Chairman, I have
    had you out there, haven't I, to the EERC? They do amazing
    stuff. And he just brings a wealth of experience in CCUS
    technology. I am getting all excited because I remember when it
    was CCS and now it is CCUS. Utilization, I guess, got added in
    there. Was that new with the addition of the Ranking Member to
    this?
        Senator Manchin. Utilization, if we could utilize it better
    than sequester it----
        Senator Hoeven. Well, I will tell you what, you better tell
    King it is going to take a lot of bottles and a lot of fizz, if
    that is what we are----
        Senator Manchin. He is right.
        Senator Hoeven. One example of John's ability to
    collaborate is his efforts to grow the Plains CO2
    Reduction Partnership, PCOR, which is one of seven regional
    carbon sequestration partnerships awarded by the Department of
    Energy. Under his leadership, PCOR has grown to include more
    than 100 U.S. and Canadian stakeholders, and in that endeavor
    they secure a minimum of 20 percent cost share from all our
    non-federal partners.
        I should mention, too, that with the Dakota Gasification
    Plant, we are stripping CO2 off of the process
    whereby we convert coal to synthetic natural gas. We are
    sending that CO2 in a huge pipeline, compressed and
    liquified under real cold temperature. It goes to the Weyburn
    Oil Fields in Saskatchewan, Canada and it goes down a hole for
    tertiary recovery. They are doing that on a commercially
    successful basis right now which, of course, is what we have.
    That is what today is all about. That is where we have to get
    to. We can't just do it up in North Dakota and Saskatchewan, we
    have to do it all over the world, right? That is what today is
    all about.
        So this really reflects our all-of-the-above approach--in
    this case, CCUS technology, applying that technology to coal-
    fired plants.
        I am going to want to talk particularly to the Honorable
    Steven Winberg about some projects we are working on. Project
    Tundra which is post combustion and the Allam Cycle which would
    be building a new plant. And we have John here to just keep you
    honest and make sure whatever you tell us is the straight
    stuff, because he really knows this stuff.
        I am teasing him obviously, but he is, I am not teasing
    about the fact that he is deeply, deeply immersed into this
    stuff, the way we have to be.
        It is not about getting to technological feasibility, you
    all can do it. It is about getting to commercial viability.
        So again, John, thanks for being here and for all your
    great work. But to all of you, thanks for being here and for
    your great work.
        Madam Chairman, thank you for your indulgence. I appreciate
    it very much.
        The Chairman. Thank you. We do appreciate not only the
    expertise that Mr. Harju brings but that all of you do. So we
    are looking forward to your testimony here this morning.
        Mr. Winberg, we will begin with you. I ask you all to try
    to limit your comments to about five minutes, and your full
    statements will be included as part of the record. Then we will
    have an opportunity for the back and forth afterwards.
        Mr. Winberg, welcome.

            STATEMENT OF HON. STEVEN E. WINBERG, ASSISTANT
            SECRETARY FOR FOSSIL ENERGY, U.S. DEPARTMENT OF
                                 ENERGY

        Mr. Winberg. Thank you, Chairman Murkowski, Ranking Member
    Manchin and members of the Committee.
        With the Committee's ongoing support, we are backing up our
    commitment to CCUS with the R&D necessary to advance these
    technologies, improve our environmental footprint and advance
    U.S. world leadership in this critical area.
        With respect to S. 1201, the Enhancing Fossil Fuel Energy
    Carbon Technology Act of 2019, the Administration is currently
    reviewing this legislation. I look forward to answering any
    questions you may have on the legislation. As always, the
    Administration is ready to provide technical assistance, as
    needed, on this legislation, moving forward.
        The American taxpayer has invested nearly $4 billion in
    CCUS since 2010. We are approaching the point at which the
    American taxpayer will receive return on this investment.
        Just over the horizon, we see energy generation
    technologies that can deliver electricity with near-zero
    greenhouse gas emissions at some of the lowest costs in the
    world. We also see a robust enhanced oil recovery industry that
    can produce oil with 37 percent less CO2 emissions
    on a life-cycle basis.
        So far this fiscal year, the Fossil Energy Office of DOE
    has selected carbon capture technology projects totaling $24
    million; we've announced $30 million for front-end engineering
    and design studies for capture systems on both coal and natural
    gas plants; we've announced $20 million for a regional
    initiative to accelerate CCUS; and we plan to release a $30
    million Funding Opportunity Announcement (FOA) for large-scale
    CO2 storage projects through DOE's CarbonSAFE
    initiative that is focused on the development of geological
    storage sites for CO2. We've selected multiple
    projects, totaling $13 million, to develop innovative methods
    for converting CO2 into valuable products and
    chemicals through our Carbon Utilization program, and we've
    launched the Coal FIRST initiative to develop the coal plant of
    the future to provide secure, stable, reliable power with near-
    zero emissions, including CO2. These plants will be
    flexible. They'll be innovative. They'll be resilient, small
    and transformative.
        Commercializing and deploying CCUS technologies is a
    realistic path to addressing CO2 on a large scale.
    Funding provided by Congress through the Fossil Energy Office
    has resulted in the commercial operation of the world's three
    largest CCUS demonstration projects--Petra Nova, Air Products
    and Archer Daniel Midland. These projects already have
    captured, utilized and stored almost nine million metric tons
    of CO2.
        Fossil Energy's robust CCUS R&D program has produced some
    impressive results like these demonstration projects, but the
    most significant hurdle is the cost associated with carbon
    capture which we aim to reduce by 50 percent to $30 a metric
    ton by 2030. This is a challenging goal but with Fossil
    Energy's R&D and the 45Q tax credit, we have the potential to
    reach that cost reduction target.
        One important element of Fossil Energy's R&D effort is
    direct air capture which is aimed at improving capture
    efficiency, reducing energy and capital cost and lowering water
    resource demands by leveraging our $4 billion investment on
    CCUS technologies.
        Fossil Energy is performing exploratory research in this
    area and currently has three direct air capture research
    projects. Fossil Energy's CO2 capture expertise
    creates an opportunity to work toward DAC commercialization, or
    Direct Air Capture.
        So we appreciate the Committee's interest, support, and
    commitment to provide DOE with the tools necessary to advance
    CCUS technologies, and I look forward to answering your
    questions.
        Thank you.
        [The prepared statement of Mr. Winberg follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        The Chairman. Thank you, Mr. Winberg.
        Dr. Friedmann, welcome.

     STATEMENT OF DR. S. JULIO FRIEDMANN, SENIOR RESEARCH SCHOLAR,
     CENTER ON GLOBAL ENERGY POLICY, COLUMBIA UNIVERSITY SCHOOL OF
                     INTERNATIONAL & PUBLIC AFFAIRS

        Dr. Friedmann. Chairman Murkowski, Ranking Member Manchin,
    members of the Committee, Senator Barrasso, Senators Hoeven,
    King and Cortez Masto, it's a real treat to be here. Thank you
    for inviting me to discuss the EFFECT Act and the DOE CCUS
    programs.
        I'm Dr. Julio Friedmann. I'm the Senior Research Scholar at
    Columbia's University Center on Global Energy Policy.
        It's an honor to appear before this Committee. Since my
    last Congressional testimony, the world has changed a lot.
    Analysis from the IPCC and dozens of other organizations
    conclude that CCUS is required; it's essential to achieve
    important climate targets, including two degrees, much less one
    and a half degrees. In fact, without CCUS most models do not
    converge on a solution at all. Those that do cost more than
    twice as much to reach the same target. That's why the Center
    for Global Energy Policy has launched the Carbon Management
    Research Initiative which I lead.
        The world of CCUS has also changed, even in a year. Today
    18 projects worldwide, including one in China, prevent 34
    million tons of CO2 from entering the air. The U.S.
    hosts eight of these facilities, the most of any country. More
    are on the way, in part, because of policies enacted by the
    House and Senate, notably the 45Q amendment under the Future
    Act. In short, you can't do CCUS without the U.S.
        Groups like the IEA, Global CCS Institute and others
    underscore how CCUS is an essential approach to support both
    economic growth and rapid deep decarbonization. Many countries
    have added CCUS to their climate and energy plans. This
    includes new projects in China, Norway and the Middle East and
    new policies imperatives in the U.K., the Netherlands and
    Canada. It should now be clear to all that CCUS is not some
    untested technology or green washing or license to pollute.
    Quite the opposite, it is an overt, committed pathway to deeply
    and quickly reducing greenhouse gas emissions in a cost-
    effective way.
        From 2013-16, I served as Principal Deputy Assistant
    Secretary for the DOE's Office of Fossil Energy and had the
    great pleasure of working with the people there who Steve
    Winberg currently has the great pleasure of working with and
    managing.
        At the time we began to rethink our R&D portfolios driven
    by the profound shifts in U.S. and global energy markets. To
    respond to these shifts, we instituted changes in the R&D
    program in partnership with the National Energy Technology Lab
    in the great State of West Virginia: We decreased focus on coal
    gasification and increased focus on advanced power cycles,
    including things like NET Power's Allam Cycle; we shifted from
    broad geological assessments in the regional partnerships
    toward site specific focus for regions through the CarbonSAFE
    program; we helped launch and lead two cross-cutting R&D
    programs, the Supercritical CO2 and the SubTER
    initiatives; we began to explore issues and opportunities for
    applying CCUS to industrial facilities, not just power
    facilities; we scaled up our program on CO2
    conversion, and we issued the first grants on CO2
    removal and direct air capture. One of those grants to Carbon
    Engineering led to $68 million of private investment in the
    last year.
        It soon became clear, not only would these new efforts
    prove important, but that also additional programs with
    additional funding would be necessary. If this sounds familiar,
    it's because they're embodied in the framework of the EFFECT
    Act. Although basic research remains important, both the
    maturity of CCUS and the urgency of climate change require us
    to emphasize applied R&D, large pilots and ultimately
    demonstrations.
        My office was hampered by Congressional language which
    limited our ability to spend money based on fuel type. Both
    coal and gas are important parts of the U.S. energy system and
    biomass, increasingly, will be. All require carbon management
    and CCUS to serve broad public interests. In a carbon
    constrained world, in a carbon constrained economy, we have to
    emphasize our mission more than our fuels.
        The U.S. has substantially underinvested in advanced
    technology options for heavy industry, including ways to reduce
    carbon pollution. Heavy industries like steel, cement,
    refining, petrochemicals and others are essential to the U.S.
    economy; they also represent 21 percent of our emissions. A new
    innovation thrust would help create clean, muscular U.S. heavy
    industry.
        As I mentioned before, the CarbonSAFE program helps to
    identify and de-risk possible storage sites by providing site
    specific knowledge and data to potential operators. Already,
    CarbonSAFE has begun to unlock private capital investments and
    potential CCUS projects and more are on the way.
        Technology advancement, low cost, abundant clean power and
    the harsh mathematics of climate change urgency have revealed
    CO2 removal and CO2 recycling to be both
    viable and essential, including technologies of direct air
    capture, CO2 mineralization and converting
    CO2 to products like cement and fuels.
        All of these imperatives are represented in the EFFECT Act.
    I see it to be very similar to the SunShot Initiative which
    helped focused innovation on solar power and contributed
    substantially to cost reductions in those fields.
        That said, the EFFECT Act alone will not bring CCUS to
    market. Additional policies are needed to accelerate deployment
    and align markets. I've listed all of that in my full testimony
    and I look forward to your questions.
        Thank you very much.
        [The prepared statement of Dr. Friedmann follows:]

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        The Chairman. Thank you, Dr. Friedmann.
        Mr. Goff, welcome.

                  STATEMENT OF ADAM GOFF, PRINCIPAL,
                         8 RIVERS CAPITAL, LLC

        Mr. Goff. Thank you, Chairman Murkowski, Ranking Member
    Manchin and members of the Committee for the opportunity to
    discuss carbon capture innovation and the EFFECT Act.
        I will be discussing today a whole new method of carbon
    capture called the Allam Cycle, which was invented ten years
    ago by 8 Rivers, the innovation for and where I serve as Policy
    Director.
        8 Rivers created the company NET Power to commercialize the
    natural gas Allam Cycle which has garnered over $150 million in
    investment between its four partners: 8 Rivers, Exelon,
    McDermott and Oxy Low Carbon Ventures.
        NET Power built a successful 50-megawatt thermal plant and
    world class test facility in La Porte, Texas, that achieved
    combustor first fire in May 2018. The novel combustion and
    CO2 turbine were supplied by our technology partner,
    Toshiba. This technology is a paradigm shift, because it has
    the potential to sell power at a lower price than conventional
    power plants, while releasing zero emissions. Today, multiple
    300 megawatt-scale NET Power plants are in early stage
    development around the world.
        Here's how it works. The Allam Cycle burns natural gas or
    coal in pure oxygen, rather than in air. This creates a high
    purity stream of CO2 at 1150 degrees Celsius. This
    CO2 is supercritical and is used to drive the
    turbine instead of using steam. That CO2 is then
    ready to be sent to a pipeline at no additional cost.
        CO2 capture is inherent to the system, and
    selling CO2 is actually a key source of our revenue.
    These multiple revenue streams are what give NET Power a cost
    advantage. And by using the supercritical CO2, this
    cycle can reach the same efficiency as a conventional natural
    gas power plant all while achieving over 97 percent carbon
    capture and creating zero air pollutants.
        The Allam Cycle also partners well with renewables ensuring
    the constant availability of low-cost, dispatchable clean
    energy. We believe it will allow the world to meet its climate
    targets at a cost that can be afforded by all people.
        The Allam Cycle is a breakthrough technology, not just for
    the power sector, but also for the oil and gas, environmental
    and petrochemical sectors. It has the potential to lower the
    cost of electricity from fossil fuels while eliminating air
    emissions and capturing CO2 for sequestration,
    enhanced oil recovery and other forms of carbon utilization. It
    will co-produce other valuable gases, nitrogen and argon which
    support America's manufacturing sector.
        Each plank can also provide 150 megawatt-hours of energy
    storage, taking in excess renewable electricity and using it to
    create the pure oxygen this plan needs. That oxygen is then
    stored in tanks for later use when the sun sets or the wind
    slows.
        While the Allam Cycle is a major breakthrough, it mostly
    utilizes proven components. Many of these, like advanced nickel
    alloys, were developed with federal research dollars. The
    Office of Fossil Energy has also directly supported Allam Cycle
    development, most recently through the Coal FIRST program.
        NET Power also applauds the Committee for its introduction
    of the EFFECT Act. The legislation's focus on breakthrough
    carbon capture technologies, large-scale carbon sequestration
    and carbon utilization, is critical to the success of the
    entire carbon capture industry.
        We appreciate that it spans the full R&D spectrum from
    research to pilots demonstration, all of which we've learned
    from our experience are necessary to commercial novel
    technologies.
        Additionally, we thank Congress for its leadership in
    expanding the 45Q credit last year. These credits will
    accelerate the deployment of carbon capture technologies like
    NET Power, and they have made America the ideal location to
    demonstrate carbon capture projects.
        Globally, NET Power envisions a robust market for this
    technology because of its low-cost profile. Countries like
    China and India could build coal and gas Allam Cycle plants
    purely for the economics with the follow-on benefit of reducing
    local air pollution and cutting global carbon emissions.
        With innovative technologies like NET Power spreading
    beyond America's shores, we believe America--we believe clean
    energy can become affordable for the whole world.
        Thank you.
        [The prepared statement of Mr. Goff follows:]

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        The Chairman. Mr. Goff, thank you very much.
        Mr. Harju.

         STATEMENT OF JOHN HARJU, VICE PRESIDENT FOR STRATEGIC
    PARTNERSHIPS, UNIVERSITY OF NORTH DAKOTA ENERGY & ENVIRONMENTAL
                            RESEARCH CENTER

        Mr. Harju. Good morning, Chairman Murkowski, Ranking Member
    Manchin and members of the Committee, and thanks to Senator
    Hoeven, now gone, for the kind introduction. I'm happy to
    provide a brief commentary today regarding what I call EERC,
    which stands for Energy & Environmental Research Center, a
    business unit of the University of North Dakota, and we're
    focused on providing practical solutions to the world's vexing
    energy and environmental challenges.
        We were initially founded in 1951 under the U.S. Bureau of
    Mines. Later we became one of the Department of Energy's five
    energy technology centers and since 1983 have been part of the
    University of North Dakota.
        Our mission has evolved considerably since that time,
    initially focused exclusively on coal utilization and at this
    point in time, focused on all forms of energy and the intended
    environmental challenges associated with their development and
    utilization.
        In the arena of CCUS, EERC has had the privilege of serving
    a very, very large number of partners across the entire CCUS
    value chain. These projects have included everything from broad
    reconnaissance-level assessments of storage opportunities to
    detailed assessments of prospective storage reservoirs and
    field validation of ongoing commercial scale CCUS projects,
    from cursory desktop evaluations of numerous capture
    technologies to pilot tests and ongoing field campaigns of
    their performance for full-scale deployment, also from paper
    studies of new-generation platforms such as the Allam Cycle to
    pilot testing and demonstration-scale field evaluations. So
    again, across the entire broad value chain of CCUS. These
    projects have benefited from ongoing, robust financial support
    via the Department of Energy's Fossil Energy Program.
        Way back in 2003, the Department launched a solicitation to
    establish a series of Regional Carbon Sequestration
    Partnerships and Senator Hoeven mentioned that earlier as well.
    But the focus at that point in time was to develop a regional
    inventory of sources and sinks. EERC's partnership there is
    called the PCOR partnership. And one of those first eye-opening
    things for a simple fellow like me was our region's emissions
    are inextricably linked to our economic activity. So whether
    that's the mining and manufacturing and industrial centers
    around the Great Lakes or in the Mississippi River Valley or
    the agribusinesses of Iowa, Minnesota, Nebraska or the Dakotas,
    or the oil and gas and coal-producing regions of the Northern
    Great Plains, each of these areas has an economic engine and
    each of those economic engines represent the primary emission
    of CO2.
        A key partner offered way back then that he doesn't see a
    carbon constrained world but rather a carbon managed world, and
    with that as a backdrop we set out to develop what we found to
    be economically viable, carbon management activities. Today,
    our partnership has growing interest with more than 120
    engaged, strategic partners.
        So in subsequent phases of work we led a series of four
    discrete field experiments, each of those inherently tied to
    one of those significant engines and opportunities. Concurrent
    efforts of my team in conjunction with numerous additional
    stakeholders and under the leadership of then-Governor Hoeven,
    our state established comprehensive geologic storage rules for
    carbon dioxide and later became the first and still the only
    state-granted primacy under the EPA's Class VI storage program.
        So the most recent phase of our effort has been focused on
    full commercial-scale validation of EOR-related storage at
    Denbury Resources' Bell Creek Field in southeastern Montana.
    CO2 is sourced from natural gas processing
    facilities in Wyoming, brought to the field and used in EOR.
        The field currently produces more than 7,000 barrels a day,
    that's up from a few hundred barrels a day at the time of
    implementation, and at full fruition the project will produce
    more than 40 million barrels of oil and permanently store more
    than 15 million tons of CO2. At this point more than
    six million tons of CO2 have been stored at that
    location.
        Gas processing facilities, such as that which are sourced
    for Bell Creek, really represent ``low-hanging fruit'' in terms
    of available and readily capturable CO2, but we
    don't see substantial opportunity to expand that because of
    either low concentrations of CO2 in that gas
    processing feedstock or because they're already being captured.
        Ethanol facilities also represent a substantial opportunity
    and we're fortunate enough to be working with Red Trail Ethanol
    in North Dakota on a facility, also focused on geologic storage
    of CO2.
        Senator Hoeven mentioned Project Tundra, another key effort
    in our area that we've been fortunate enough to be engaged in.
    That project, led by Minnkota Power Cooperative, is working to
    deploy a post-combustion capture system at Minnkota's Milton R.
    Young facility. That CO2 captured would be used and
    stored in regional oil fields for EOR and also that location is
    the host of one of the CarbonSAFE efforts that Mr. Winberg and
    Dr. Friedmann had mentioned.
        We see CarbonSAFE as a key compliment to the regional
    partnerships program. CarbonSAFE being one where we validate
    specific geologic storage sites of a minimum size and nature,
    but we see the regional partnerships as helping us develop and
    build out these compelling business cases that, I think, allow
    CO2 storage to become a substantial part of our
    economic framework.
        None of this work would have been possible without the
    foresight of this key Committee, your counterparts in the
    Appropriations Committee and the Department of Energy. Senate
    bill 1201 continues this critical recognition and support of
    the programs that drive our innovation.
        I'm particularly pleased with the bill's recognition of the
    regional carbon sequestration partnerships and CarbonSAFE
    efforts. We're currently preparing a key proposal to DOE that
    would expand our region to include the key energy State of
    Alaska and to broaden and complete our engagement with the
    State of Wyoming.
        Thank you very much for your time, and I look forward to
    your questions.
        [The prepared statement of Mr. Harju follows:]

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        The Chairman. Thank you, Mr. Harju, we appreciate that.
        Mr. Jackson, welcome.

     STATEMENT OF RICHARD JACKSON, PRESIDENT, LOW CARBON VENTURES,
                          OCCIDENTAL PETROLEUM

        Mr. Jackson. Chairman Murkowski, Ranking Member Manchin,
    members and staff of the Senate Environment and Natural
    Resources Committee, thank you for the opportunity to testify.
        I appreciate your leadership on carbon capture and the
    EFFECT Act which Occidental is proud to support.
        My name is Richard Jackson, and I work as President at
    Occidental's Low Carbon Ventures. Occidental is one of the
    largest independent oil and gas companies in the United States.
    We have spent the last few years working with internal and
    external stakeholders to discuss climate change and solutions.
    I look forward to discussing those with you today.
        Low Carbon Ventures was formed in 2018 to enhance our
    business and reduce atmospheric greenhouse gas. Today our
    management is exploring an aspiration of becoming carbon
    neutral, accounting not only for our operational emissions but
    also for the emissions related to the use of our products. We
    seek to do this while continuing to grow our business.
        The significant driver is carbon capture and use, with the
    near-term ability to produce a carbon neutral barrel of oil.
    The technology we use will also help advance other commercial
    low carbon products and business opportunities.
        While we appreciate there are many different low carbon
    strategies for energy companies, at Occidental we are in a
    unique position as the world's largest consumer of
    CO2 which we have used for over 40 years in enhanced
    oil recovery or EOR operations. We sequester over one billion
    cubic feet of CO2 per day which is the emissions
    equivalent of four million passenger vehicles. Utilizing more
    man-made CO2 will allow us to grow this business
    while sequestering significantly more.
        As we look forward to meeting a lower carbon energy demand,
    our capability presents great potential. In fact, the
    International Energy Agency confirms that a barrel of oil
    produced using man-made CO2 has a significantly
    reduced carbon footprint compared to a conventional barrel.
        While we estimate we can, at Oxy we estimate we can reduce
    this further enabling us to produce a carbon neutral and even
    carbon negative barrel of oil. In short, we are increasing
    today's production, tomorrow's reserves and significantly
    decreasing our collective carbon impact.
        Currently CO2 EOR offers the most favorable
    economic approach to carbon capture. However, we believe the
    future will hold many other commercial uses for CO2,
    everything from making synthetic, low carbon fuels, to low
    carbon materials like cement and plastics. EOR can pave the way
    in the near-term, not only for carbon capture but also for
    critical CO2 pipeline infrastructure, that can help
    drive this innovation and commercializing of new products.
        Occidental is investing and partnering to advance these
    innovative uses of CO2. We believe these business-
    driven solutions will have a meaningful and profound impact on
    reducing CO2 emissions, not only in the United
    States but across the globe.
        While we believe that carbon capture, utilization, and
    sequestration is a critical technology to meet many of our
    nation's priorities, we also believe it should complement other
    low carbon solutions. At Oxy we are focused on three: reducing
    the emissions from our own operational activities; energy
    efficiency; and, of course, carbon capture of use, both from
    industrial sources and also directly from the air.
        Oxy Low Carbon Ventures have found significant value in
    working with non-traditional allies to advance these goals and
    we have made three major announcements in the last year: With
    White Energy, a biofuels producer in Texas and Kansas, we're
    exploring options for capturing man-made CO2 from
    their ethanol facilities; Occidental invested with NET Power
    which joins us today which develops zero emission natural gas-
    powered generation; we also invested in British Columbia-based
    Carbon Engineering which developed a technology that pulls
    CO2 from the atmosphere.
        Occidental is proud to be involved in key carbon reduction
    coalitions, including the Oil and Gas Climate Initiative and
    the Carbon Capture Coalition. Partnerships like these would not
    have been possible for us without the work of the Senate to
    expand and extend 45Q and the tax credit in 2018 making
    investment in carbon capture possible.
        As our CEO, Vicki Hollub, has said, partnerships with a
    variety of stakeholders is the most efficient and perhaps the
    only pathway to solving climate change risk. To that end, we
    ask Congressional leadership to help advance commercialization
    through large-scale CO2 transportation networks.
    Regional and then national large-scale CO2 pipeline
    networks act as the foundation for a CO2 economy,
    moving CO2 from emissions to commercial uses.
        We look forward to working with you to incentivize the
    build-out of a robust national CO2 transportation
    network.
        Thank you for the opportunity to speak with you today about
    an issue that our CEOs, our employees and I are very passionate
    about. I look forward to helping answer any questions that you
    may have.
        [The prepared statement of Mr. Jackson follows:]

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        The Chairman. Mr. Jackson, thank you very much, we
    appreciate that.
        Mrs. Lagano, thank you.

      STATEMENT OF JUDITH LAGANO, SENIOR VICE PRESIDENT OF ASSET
                      MANAGEMENT, NRG ENERGY, INC.

        Mrs. Lagano. Thank you.
        Chairman Murkowski, Ranking Member Manchin, members of the
    Committee, I am honored to be here today testifying on CCUS and
    the role it can play in reducing greenhouse gas emissions.
    Thank you for your leadership on this issue, including the
    introduction of S. 1201, the EFFECT Act.
        My name is Judith Lagano and I'm Senior Vice President of
    Asset Management for NRG Energy, Inc., a large, publicly
    traded, competitive power company.
        At the outset, I'd like to provide some context of what it
    means to be competitive in the electricity sector. It means
    that NRG does not have captive ratepayers from whom we can
    recover costs or guaranteed returns. Our shareholders, not our
    customers, bear the risk tied to our power plants. We have to
    compete for our customers and we are proud of the services that
    we provide to them.
        Our company is also proud to be a leader in addressing
    climate change. We have established targets to reduce our
    carbon emissions 50 percent by 2030 and 90 percent by 2050. We
    are ahead on meeting these goals and we are making business
    decisions to meet them in an affordable and reliable way.
        This morning I want to focus on carbon capture,
    utilization, and storage, our perspective on Ranking Member
    Manchin's bill, the EFFECT Act, and NRG's experience at Petra
    Nova, the only commercial-scale CCUS project in the U.S. and
    the largest in the world.
        Petra Nova became operational on December 29th, 2016, on
    time and on budget. It captures CO2 from NRG's WA
    Parish power plant, located southwest of Houston, Texas. We use
    an amine-based, post-combustion technology to capture 90
    percent of the CO2 from a 240-megawatt equivalent
    slip stream of flue gas from a coal-fired unit at the plant.
    The captured CO2 is then compressed and transported
    81 miles via pipeline to the West Ranch Oil Field where it is
    injected to enhance oil recovery and ultimately sequestered in
    the oil field. As of the end of April 2019, the plant has
    delivered almost three million tons of captured CO2,
    equivalent to pulling almost 600,000 cars off the road for a
    year. From an engineering perspective, the project has been a
    great success.
        To help finance and achieve the technological goals of the
    project, NRG partnered with JX Nippon, a global oil and gas
    company, in a 50/50 joint venture. Additionally, Petra Nova
    formed a joint venture with Hilcorp Energy, a privately held
    oil and gas company to use enhanced oil recovery to increase
    oil production at the West Ranch Oil Field. The revenue
    generated by the sale of oil from that field is used in turn to
    service the project's debt and fund going forward cost. We are
    parties to the third partnership as well and one that is very
    important to this Committee.
        Petra Nova would not exist without support from the U.S.
    Department of Energy which provided $190 million cost share
    grant to defray the project's approximately $1 billion price
    tag. That support was made possible by Congress authorizing and
    funding programs very similar to those authorized in the EFFECT
    Act.
        As with any first of a kind effort, we have learned several
    lessons from Petra Nova. We have gained a valuable
    understanding of the challenges presented by scaling up to
    commercial scale, the impact of location specific
    considerations such as ambient temperature and the capital and
    operating costs, along with options to reduce or manage both.
        What we have learned has, of course, been shared with DOE
    and provides valuable insights for the next generation of CCUS
    projects. The EFFECT Act does a good job of providing the
    authorities needed for DOE to advance the next generation of
    CCUS through additional public-private partnerships.
        As the bill moves forward, we encourage the Committee to
    position the Federal Government as an active partner in making
    projects work from both an engineering and a business
    perspective. One way to strengthen these partnerships would be
    allowing DOE's Loan Program Office to refinance project debt.
    As technologies are proven, they become less risky which should
    allow for lower cost financing. This could provide a shot in
    the arm to projects that are demonstrating new technologies but
    also working to prove that they can operate profitably. I would
    also encourage this Committee to collaborate with the tax
    writing committees to ensure that the 45Q tax credit is
    implemented in a way that provides flexibility around
    eligibility for and the receipt of the credit.
        The EFFECT Act, in combination with other policies that I
    have mentioned, can help and will help to continue advancing
    commercial scale CCUS by facilitating technological
    improvements to drive capital and operating costs lower, the
    ability to sell CO2 for enhanced oil recovery and
    other uses at competitive prices and access to tax credits that
    can improve project economics.
        We applaud the Committee for remaining engaged, both on the
    challenge presented by climate change and on deploying the
    technologies needed to solve that challenge. At NRG, we are
    also committed to being a part of that solution.
        We thank you again for the opportunity to appear this
    morning and I'm happy to answer any questions that the
    Committee may have.
        [The prepared statement of Mrs. Lagano follows:]

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        The Chairman. Thank you, Mrs. Lagano. Thank you all for
    your testimony this morning.
        I am reminded as I listen to this that we have some of the
    most fun here in this Committee in terms of being able to be
    updated on what is happening with the technologies out there
    that are really making a difference. Not only making a
    difference from the access to energy, the affordability, but
    what we are doing to advance measures that truly are more
    clean.
        I don't know why it should be so revolutionary to think
    that this is all about management, but I have heard each of
    you--Dr. Friedmann, you articulated it very clearly; and Mr.
    Goff, you followed on it; and Mr. Harju said, we are not in a
    carbon constrained world, but rather a world of carbon
    management. And how we manage this in different ways is really
    starting to make a considerable difference.
        Whether it is the deployment with what you have out there
    at Petra Nova in Texas, what is coming on with Project Tundra,
    or what you are doing with NET Power, you all are managing
    carbon in different ways because you do not have the same
    assets in every location.
        Mrs. Lagano, you mentioned that the impact of location is
    key. I am curious about the ambient temperature. I hadn't
    thought about things like that. I think about where you have
    geologic areas underground that you can utilize but it is just,
    again, a reminder that managing is going to look different
    depending on where you are.
        We get this mindset back here in Washington that we can
    just check off a series of steps that you can take, and we are
    going to all be utilizing this same process and it is going to
    work everywhere. It just demonstrates that we are not the
    scientists and the engineers. You all are, and we need to be
    listening to you.
        So, Mrs. Lagano, you have identified some things that I
    think are important for us to keep in mind, the imperative of
    45Q and loan guarantees. Those are some of the things that we
    can help to facilitate. Oftentimes what we realize is that we,
    the government, are in the way of some of the important
    opportunities because we put regulatory impediments in your way
    and permitting issues in the way, so it's not just the economic
    challenges.
        So, you all have been working to really get things from
    beyond the drawing room, really, out to application. Mr. Goff,
    Mr. Harju, Mrs. Lagano, and Mr. Jackson as well at Oxy, what do
    we need to be doing to clear the path of impediments on the
    regulatory side, but also some of the economic challenges that
    you face that we can be helpful at the federal level? And I
    don't mean to limit it to just four of you, all can jump in,
    but please go ahead, whoever wants to jump.
        Mrs. Lagano?
        Mrs. Lagano. I'll start, yes, thank you.
        I think what we could do is that assisting technology
    providers to drive capital costs lower, right, as we do a
    project and we learn from, for example, NRG's experience
    scaling up. How can we use that for the next project to reduce
    cost and drive, ultimately, the cost of delivered
    CO2 down?
        The Chairman. How do you share that with others so that
    they gain the benefit of your taking the first step?
        Mrs. Lagano. Yeah so, in working closely with the DOE, we
    are providing information to them regularly about the
    challenges that we face and we solve. And we do that in a
    cooperative environment and a collaborative environment with
    the DOE so that the benefit of our experiences can be used for
    the next generation of technology, and frankly, to enhance our
    own existing project.
        The Chairman. Others? Mr. Jackson?
        Mr. Jackson. Thank you very much. I think I can speak to
    that, and I appreciate those comments.
        You know, for us, 45Q was certainly a significant step. I
    think not only the enhancements that were created out of 45Q,
    but the longevity created investible projects, both for
    technology and ultimately CCUS.
        I think we agree that R&D in the technology and especially
    from the capture can do a lot to promote the available low-cost
    supply of CO2 that we can ultimately use in a
    productive way.
        Beyond that, we think R&D around utilization is important.
    So today we talk mostly about enhanced oil recovery, but I
    think for this to collectively work, more utilization
    opportunities should exist.
        The Chairman. Outside of EOR?
        Mr. Jackson. Exactly.
        And ultimately what that does is create not only the
    source, but the sink, as we've described it, which enables
    infrastructure.
        And so, for us, we look today and we believe there are many
    commercial projects that are ready to go with available
    technology. We're looking at projects in the Midwest with
    ethanol, very low cost of capture and really the enabling
    source will be infrastructure.
        So again, lowering cost, increasing utilization, but
    ultimately creating this infrastructure for us, we see very
    near-term capabilities with CCUS at large scale.
        The Chairman. Others? Mr. Harju?
        Mr. Harju. Yes, thank you.
        I would certainly concur with appreciating remarks, but one
    thing that we see that under today's guidance the 45Q credit
    can be challenging for some to claim. And we're encouraged by
    the solicitation of comments that IRS has recently announced,
    and we're hopeful that some malleability in terms of the means
    by which one would document secure geologic storage can come to
    the table.
        The Chairman. Okay, good to know.
        Mr. Goff?
        Mr. Goff. Two things to add here.
        One, one of the reasons we think 45Q is such a critical
    incentive is it allows you to learn by doing and by building
    two or three of the same technology, you know, in a row, you
    really can drive down capital cost that allow you to build that
    without that incentive anywhere in the world.
        And then secondly, on Richard's point on infrastructure,
    the way we view the carbon capture industry, what's good for
    one technology is good for everyone else. Anytime someone
    builds a carbon pipeline or has a carbon offtake, that's
    somewhere where we look to develop a project. So anything that
    we can do to develop more carbon projects, to build more carbon
    pipelines. We currently have 5,000 miles of carbon pipelines.
    We need more. Then it helps us build projects on top of that
    and, you know, develop an entirely new industry around using
    carbon.
        The Chairman. Dr. Friedmann?
        Dr. Friedmann. Thank you.
        If I may add, first, quickly to underscore two of the
    points that have been made. One of them is, again, on this
    infrastructure issue. We could get about 40 million tons of
    carbon dioxide underground today if the pipelines existed, and
    they don't. Second is capital treatments. That's really
    essential. These are big capital projects, and it's hard to get
    your return on these things.
        But it doesn't just have to be something like the 45Q tax
    credits. There's ITCs. There's Economic Opportunity Zones.
    There's accelerated depreciation. There's lots of tools that
    could be used potentially to improve the capital profile of
    projects like this and help get more of them into market.
        The one I would add to that though is that we have a few
    bills already floating around Congress that can deal with some
    of these things. The USE IT Act is the most obvious of these in
    terms of helping to accelerate pipeline deployment. We have
    Senator Smith's Clean Energy Standard that was put on with
    Representative Lujan.
        Those are all things that can really substantively
    contribute to getting this technology to market. And it's
    entirely, in my mind, the costs and the technologies are
    already in a pretty good place. They certainly could be better,
    but it's really about finance now. These projects can't be
    financed readily, and that's where the policy support will
    prove most important.
        The Chairman. Thank you.
        Senator Manchin.
        Senator Manchin. I am going to defer to my ``carbonated''
    friend, Senator King.
        Senator King. Thank you. I have an Armed Services Committee
    meeting coming up.
        I want to provide a visual coda to the Chair's very
    thoughtful introduction and that is, why are we here? I am
    going to have one that will show it a little bit better. But
    this is 10,000 years of CO2 in the atmosphere. It is
    a little hard to see because the hockey stick is so steep, but
    where we are is at the very top of the chart now.
        [The information referred to follows:]

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        Senator King. You can see we have gone from an average of
    about 240 parts per million 10,000 years ago to 415 last week.
        Here is another one that, I think, puts it in even more
    perspective. This is 800,000 years of CO2 in the
    atmosphere. And what it shows is yes, there are variations over
    time, but we're now, again, where the red arrow is, at a place
    that we haven't been for three million years.
        [The information referred to follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Senator King. The last time we were at this level of
    carbon, the oceans were 60 feet higher and there were jungles
    in Alaska--that is why there is oil there.
        So we are really in a very dangerous place, literally. We
    have never been here before in terms of human history. So I
    just think it is important to--I am a visual learner--to see
    where we have been for 800,000 years and where we are now. And
    it really makes this hearing, I think, a very important hearing
    and I commend the Chair and the Co-Chair for bringing this
    forward.
        My question is, what is our target? I think one of you
    mentioned, several of you have mentioned, 24 metric tons and
    300 metric tons. How many metric tons of carbon are released
    every day or every week or every year in the world? I mean, we
    need to know. I need to get a feel of what the target is.
        Doctor?
        Dr. Friedmann. So if it's just CO2, right now
    we're emitting 34 billion tons of CO2 every year. To
    give you a sense of scale, one billion tons is twice the weight
    of all the human beings on earth. So we're emitting 70 times
    the mass of humanity every year in terms of CO2.
    When you add the other greenhouse gases, it's 53 gigatons of
    CO2 equivalent.
        Senator King. So that is the target.
        What this chart tells us is we could go to zero emissions
    tomorrow, and we are still in a hell of a mess. And we have to
    start talking about not only controlling emissions, which is
    urgent, but also pulling out what is already in the atmosphere.
    Is that technology at a place where it is becoming economically
    feasible?
        Dr. Friedmann. Yup, the National Academy has just wrote a
    very substantial report on this. It looked at all of the
    pathways for CO2 removal, including natural pathways
    like forests and----
        Senator King. Forestation?
        Dr. Friedmann. Bio energy with CCS, including ethanol and
    direct air capture and mineralization. They also looked at
    carbon storage as something that encourages or makes all of
    that possible.
        The short answer is given today's technology basket, the
    U.S. can't get there. So we need to expand and accelerate.
        Senator King. Therefore, R&D.
        Dr. Friedmann. Therefore, R&D on all of them. And they
    proposed a budget of about $900 billion a year across all of
    those technology pathways, in multiple agencies, including the
    Department of Energy in the Office of Fossil Energy and USDA.
        Senator King. You said $900 billion?
        Dr. Friedmann. I'm sorry, $900 million, my apologies. That
    was a mistake, please amend the record there. So less than $1
    billion a year.
        Senator King. But this is one of the most significant areas
    of research. It seems to me that this and energy storage are
    the two great challenges that we have to face.
        My second question is, and I think you answered this in
    your discussion of projects, can this be done economically? How
    many cents per kilowatt-hour does it add to the cost of the
    power that plants are producing? Is it one cent, two cents,
    three cents? I used to be in the energy business, and I think
    in terms of cents per kilowatt-hour.
        Mr. Goff. So for NET Power, we're a bit different because
    carbon capture is inherent in our system so we can't not
    capture it. And for us we don't think there's going to be any
    premium.
        Senator King. So your energy can be sold competitively with
    other garden variety natural gas plants or----
        Mr. Goff. At the same cost or lower.
        The thing that gives us an advantage is we don't only sell
    power. We're competing against power plants to make all that
    money selling power. We sell CO2. We sell Argon.
        Senator King. You have a second line of revenue.
        Mr. Goff. We've got four revenues, yes. Argon, nitrogen,
    CO2 and power.
        Senator King. Sir?
        Mr. Jackson. I just wanted to underscore the first four. I
    think when we looked at this from a strategic level we came to
    the same conclusion. We made, obviously, industrial capture
    holds tremendous promise for the world when you think about
    exporting technology and how do you impact this globally, I
    think, industrial capture can absolutely do that.
        But we realized to make significant impact on reduction of
    atmospheric greenhouse gas, direct air capture held tremendous
    promise. So we made an investment in carbon engineering, a
    direct air capture technology and we're excited about the
    viability of that technology.
        I think, the other thing I wanted to point out earlier, is
    I think this is a great example of partnership and we view it
    across value chains.
        So, you have the capture technology. You have the
    transportation component which we've talked a lot about.
        Yet the utilization and I think where you can come
    together, you know, a company like ours can work with NET Power
    or can work with carbon engineering in a direct air capture
    plant and we can find value. How do you finance it? How do you
    construct it? How do you put the business purpose together? And
    so, we're very excited about what we think is coming over the
    coming years on both sides of that solution.
        Senator King. Madam Chair, the only thing I would add is
    that this has to be international.
        The Chairman. Absolutely.
        Senator King. We have to. If we develop these technologies,
    they should be shared because we can do everything in the world
    here, but if it doesn't happen in India and China, we are not
    going to deal with this problem.
        So I appreciate very much your being here and hope you can
    continue to inform the Committee on this incredibly important
    subject.
        Thank you.
        The Chairman. Senator King, I will allow you a little bit
    of an extension of time if you want to ask that very pressing
    question about what are we doing with technology sharing?
        Somebody mentioned that China has one of the operating, or
    I don't know whether it is commercialized. It was you, Dr.
    Friedmann. You said here in the United States we have eight.
    China has one. What are we doing on technology sharing for
    this?
        Dr. Friedmann. I'll defer to Assistant Secretary Winberg,
    first.
        Mr. Winberg. So there are a number of efforts that the
    Department of Energy is engaged in.
        One is the Clean Energy Ministerial which is countries from
    all over the world. In fact, in a couple weeks, Secretary Perry
    will be attending that meeting up in Vancouver. There's also
    the Carbon Sequestration Leadership Forum. So there's a number
    of venues that we're working through to commercialize, to share
    technology, to share best practices, not only in capture, but
    also in the movement of CO2 and, of course, storage.
        Senator King. This may be the one place where we want the
    Chinese to steal intellectual property.
        [Laughter.]
        No.
        Mr. Winberg. Well, I don't know that I'd go that far, sir,
    but----
        Senator King. Just saying.
        Mr. Winberg. ----the Chinese are moving forward on this as
    well.
        But it takes a whole suite of technologies and, from
    capture technologies, reducing the cost is important. We've
    talked about direct air capture, very important, but there's,
    it's a concentration difference.
        What's coming out of a coal-fired or natural gas stack,
    coal-fired stack is 140,000 parts per million versus 400 parts
    per million in the air that we breathe.
        So the low hanging fruit is capturing the CO2 at
    the source, at the stack, if you will. But direct air capture
    can be utilized geographically, broadly. It's expensive. We are
    working on a number of technologies to bring that cost down.
    But it is a suite of technologies.
        Senator King. I would urge the Department to work as
    cooperatively as possible with the international partners. This
    is a worldwide problem, and it deserves a worldwide
    concentration of effort.
        Mr. Winberg. Yes, sir, we are.
        Dr. Friedmann. You may be pleased to know that the Clean
    Energy Ministerial is, in fact, an essential platform and the
    DOE is showing real leadership on pulling that together.
        The International Energy Agency is now the organizing
    secretariat for the CCUS mission and, in fact, Director Birol
    is passionately committed to that and has raised that to make
    it part of that Ministerial.
        In addition to that, there is a CCUS Knowledge Centre based
    out of Saskatchewan. They share the engineering data and
    geological data from the results of their project at Boundary
    Dam and Petra Nova is party to that, as are other projects.
        The International Energy Agency's Greenhouse Gas
    Secretariat publishes exhaustively on this topic and shares
    results widely through a network. And there are many bilateral
    agreements as well between the United States and Norway, the
    United States and Netherlands, United States and the United
    Kingdom and in China and Japan. This is work that's being done.
        When I served in government I learned, much to my dismay,
    that the U.S. didn't set policy in other countries.
        [Laughter.]
        And as a consequence, we really have to approach any
    country and any opportunity as a potential partnership and
    really trying to figure out how to meet them on their terms and
    understand where they live. India is in a very different place
    on this technology than the Netherlands, and we have to
    understand and conscious that if we want to make progress.
        One last word, we should be engaging the international
    financial community on this topic. We should be meeting in
    Davos. We should be raising it in those kinds of platforms as
    well.
        Senator King. Thank you.
        Thank you, Madam Chair.
        Mrs. Lagano. I'd actually like to add----
        The Chairman. These discussions are going on in the Arctic
    sphere, in the international forum and what we need to be
    thinking about in terms of financing.
        Dr. Friedmann. Both the Arctic Circle and----
        Senator King. Mr. Harju used a term that I don't think ever
    has been used in these halls before. He used the term malleable
    in the same sentence with IRS. I don't think that has ever been
    done.
        [Laughter.]
        The Chairman. Quotable.
        Mrs. Lagano.
        Mrs. Lagano. Yes, thank you.
        So I'd like to point out from Petra Nova's perspective CCUS
    is already an international effort with our partnerships
    between American companies and Japanese companies, JX Nippon,
    as well as lending from the Japanese bank, NEXI, and JBIC. And
    we agree that given the global effects of climate change that
    it is not only good business, but it's essential that this
    technology be exported.
        And at Petra Nova we have hosted hundreds of visitors from
    around the world that are interested in the technology that we
    deployed. So we think Petra Nova is an example of how this
    already is a very extensive international effort.
        The Chairman. Dr. Cassidy.
        Senator Cassidy. Hi, Mr. Winberg. I just came back from
    Louisiana with President Trump. We looked at Sempra sending so
    much natural gas around the world. If I can quote the
    President, ``Put a big, big, beautiful plant.''
        So it is clear that gas is going to play a major role, not
    just in our energy generation but that which is around the
    world.
        Now a lot of our CCUS seems to be focused upon coal, so
    what is DOE planning in terms of research to take CCUS and
    apply it to natural gas as opposed to coal?
        Mr. Winberg. Thank you.
        Virtually all of the technology, the capture technology,
    that we've been developing is equally applicable to natural
    gas.
        Senator Cassidy. But I am told the chemistry is different,
    so there are challenges with gas that is not present with coal.
        Mr. Winberg. There's some different constituents between
    coal and gas, in the coal and natural gas exhausts, but that
    can be accommodated for. It's also more dilute stream in
    natural gas.
        We are issuing a $30 million FOA for a feed study for
    carbon capture and that will be one for coal and one for
    natural gas. Also the National Carbon Capture Center that we
    run with Southern Company is installing a natural gas facility
    so that carbon capture technologies can be tested down there
    using natural gas. They could also be tested using coal.
        The other comment that I would make, or the other thought I
    have, is on the sequestration that a molecule of CO2
    from coal or gas doesn't really care whether how it's put into
    a pipeline or where it's sequestered. So, the activity that we
    have done in the area of sequestration subsurface
    characterization is equally applicable to natural gas.
        Senator Cassidy. Got it.
        So let me ask though, the knock on CCUS for coal is that it
    detracts from the energy production and/or raises the cost of
    operating the plant. What impact does carbon capture have upon
    the cost basis of the energy produced by a natural gas, say,
    combined cycle plant or a traditional plant, two different cost
    bases and/or what is the detraction from the overall energy
    output or the efficiency of energy production?
        Mr. Winberg. There's a capital cost and there's an
    operating cost associated with CCS on natural gas, not the case
    necessarily with an Allam Cycle, but with a conventional
    natural gas combined cycle, there is.
        But with the 45Q and the opportunity to capture that
    CO2 and then use it for enhanced oil recovery,
    there's a $35 per metric ton tax credit, and if it's
    sequestered in deep saline formation there's a $50 tax credit.
        In the EOR space we're quite confident----
        Senator Cassidy. So, wait a second. You are telling me that
    which would offset the cost.
        Mr. Winberg. Yes, sir.
        Senator Cassidy. But how much would be the cost and/or the
    decrease in efficiency if you apply this technology to natural
    gas? Do you see what I am saying? Because clearly there is a
    cost because you are telling me well, we need the 45Q and the
    $50, et cetera.
        Mr. Winberg. Probably about a 20 percent decrease in the
    efficiency of the natural gas combined cycle because of the
    parasitic power you need.
        Senator Cassidy. Okay. That is significant.
        Mr. Winberg. Yes, sir.
        Senator Cassidy. Do you need any additional authorization
    from this Committee to further the--because you mentioned that
    there is some of the same stuff you are doing for coal that can
    also be applied to natural gas--but do you need more resources
    to more robustly build this out?
        I just say this because, again, the U.S. feedstock is
    increasingly natural gas and as I see Sempra, Venture,
    Magnolia, Cheniere and others shipping this gas around the
    world and we share technology, that research wants to be
    furthered.
        Do you need this Committee to do more in terms of
    facilitating that research?
        Mr. Winberg. We could always use a little bit more money.
        [Laughter.]
        Senator Cassidy. You sound like my daughter.
        Mr. Winberg. But I think the portfolio of technologies that
    we have under development right now is adequate in both the
    coal and the natural gas space.
        One of the concerns or issues that has been raised by my
    fellow panel members is, of course, the infrastructure, perhaps
    not the domain of this Committee, but infrastructure to a
    CO2 pipeline infrastructure to be able to move the
    captured CO2 into those areas where it can best be
    used for enhanced oil recovery or for storage.
        Senator Cassidy. Now I am from Louisiana so we actually
    have that--Denbury has a pipe that goes down 190. That is
    pretty close. Now granted, it is coming from Jackson,
    Mississippi, but it is close to our industrial base. So it
    theoretically could be addressed----
        Mr. Winberg. Yes, sir.
        Senator Cassidy. ----with just a little bit of add-in.
        Mr. Winberg. There's about 5,000 miles of CO2
    pipeline currently in the United States. There's some estimates
    that we need anywhere from 10,000 to 30,000 miles if we're
    going to make significant reductions in CO2
    emissions from fossil energy sources.
        Senator Cassidy. Okay.
        Well, I am over time. I yield back. Thank you.
        The Chairman. Thank you, Senator Cassidy.
        Senator Manchin.
        Senator Manchin. Thank you, Madam Chairman.
        In a perfect world, which we do not have, people are taking
    one side or the other. I think there is an elimination
    mentality.
        You all can help us immensely, basically, to understand
    what we are dealing with. There are people, and I would say
    probably the scientists and experts, a lot like yourselves, who
    might be on the other side of the fence thinking that we should
    not be doing and talking about carbon capture because we should
    be moving to other fuels. So you wouldn't have to have carbon
    capture. There is that type of a thought process.
        You all are speaking on the reality in the terms of what is
    happening in the world. It is not just in America. It is called
    global climate. It is not called North American climate or the
    United States climate. They have to understand what is going
    on, and we have to do something about it to save the planet. I
    talk to people all the time about it. They say global climate.
        Well, in terms of biblical time spans, it is Old Testament,
    New Testament, it has always been climate change. But when you
    talk in scientific terms, as far as the last century, there is
    no doubt that humans, as I think Senator King's diagram there
    showed, humans have had a tremendous impact. And it is up to
    us.
        So I keep thinking we need carbon capture and
    sequestration. We are talking about 30,000 miles of pipeline on
    and on and on. Is there not feasible technology that can
    solidify carbon, solidify the waste stream? We have to take the
    gas as we turn it into liquid now. Can it not be solidified to
    be used in a different form so you don't have to transport it?
    I am thinking outside of that.
        Next, I would ask the question, if the clear air or clear,
    you know, we call it what, direct air capture? If that is put
    in the area near a power plant rather than retrofitting a power
    plant, trying to take clear stream carbon off and liquefying
    it, is that more cost-effective, or could it be? Is there any
    type of technology that has been experimented with?
        Anybody? Whoever? Dr. Friedmann, do you want to start? And
    then Mr. Jackson, come in.
        Dr. Friedmann. Yeah, so let me answer your last question
    first.
        Because you're dealing with a more dilute stream of
    CO2 from the air as compared to any other fluid
    stream--this is what Assistant Secretary Winberg mentioned--
    direct air capture is always borne more expensive.
        Senator Manchin. Gotcha.
        Dr. Friedmann. Many people suggest that that means we
    should do CCS before direct air capture. I would say the
    opposite. This is a yes/and and not neither/or. We need to
    develop both of these technologies, because we need them both
    and we need them in spades.
        With respect to your other question about solidifying
    CO2, the near-term application for that is actually
    turning CO2 into cement and concrete.
        Senator Manchin. Yes, I know.
        Dr. Friedmann. And there's good technologies to do that now
    and those companies are scaling fast. It is possible to turn
    CO2 into carbon black which we use to make tires and
    that's a durable carbon into carbon nanotubes. There's, maybe,
    a dozen companies out there who are working on similar
    technologies.
        Senator Manchin. That is not through solidification or----
        Dr. Friedmann. Yeah, it's conversion basically, but it's
    turning into a solid building material and a solid feedstock,
    all of which is good.
        Senator Manchin. So that is all doable? That technology is
    there now?
        Dr. Friedmann. It's not--those technologies are not yet
    commercial. The cement and concrete is. The others need some
    help. And actually, it's part of the reason why a
    CO2 utilization line in the DOE's budget is so
    valuable.
        Senator Manchin. Okay.
        Mr. Jackson?
        Mr. Jackson. May I just, a few points?
        Senator Manchin. Sure.
        Mr. Jackson. You know, I think when we look at
    technologies, we view it over different time horizons and it
    is, it should be a competitive space to make great commercial
    technologies, low carbon technologies. And so I do think it
    takes all-of-the-above and we certainly support that.
        I think, when you look at an example of a direct air
    capture plant near a gas plant, there could be different time
    horizons. I think, you know, when you look at a technology like
    NET Power and envision CO2 infrastructure, I think
    you can look forward to placing, if you're going to place new,
    industrial centers anywhere in the world, it should be near
    utilization or infrastructure.
        I think the way you get to the products that you described
    is through available low-cost use. And I think, you know,
    there's obviously transportation costs that come on the back
    end of that product as well. And so oftentimes you need that
    infrastructure to get it to a point where their marketing
    capability and cost is low as well.
        Senator Manchin. Thank you.
        Mrs. Lagano, if I can?
        First of all, I want to thank you. I was able to come to--
    and you all were so kind. I have been to Petra Nova, and I have
    seen what is feasible.
        I was concerned about the cost. And basically, with the
    Federal Government's help, DOE and everyone's help with that,
    it still makes it quite challenging. I was also concerned that,
    even with the enhanced oil recovery, it is still not a viable
    project financially.
        Mrs. Lagano. So, thank you.
        Senator Manchin. So I am concerned about that. Have we
    advanced and learned enough off of Petra Nova how to do it and
    make it more cost-effective? Because give me the oil recovery
    in the fields you have entered into before and after the
    injection.
        Mrs. Lagano. Yes, so thank you, Senator Manchin. It was a
    pleasure to have you. We're extremely proud of the project, and
    we love to have visitors come.
        Senator Manchin. Well, you should be. It is wonderful. And
    I will tell you, I would recommend if you have not been to
    Petra Nova, go see it. Go ahead.
        Mrs. Lagano. So oil recovery, enhanced oil recovery, is a
    very important part of the economics of Petra Nova in terms of
    the revenues that it generates.
        Senator Manchin. Cost.
        Mrs. Lagano. So there are a few revenue streams----
        Senator Manchin. How much did you enhance the field by,
    just explain that? How many barrels were you getting out of the
    field before you started injecting?
        Mrs. Lagano. So less than 100 barrels a day, perhaps.
        Senator Manchin. And where are you now?
        Mrs. Lagano. And multiples of that.
        Senator Manchin. I thought you were on 3,000 or 4,000
    barrels now?
        Mrs. Lagano. We're up from that.
        Senator Manchin. It is hard. You would think that would be
    economically beneficial.
        Mrs. Lagano. Yes, so no question that it's working and that
    is a focus of ours is to maximize the oil revenues from the
    fields.
        And one thing that's interesting about this project, when
    we talked about, Senator Murkowski talked about, what you learn
    from specific locations. So in this specific location we are in
    the Gulf Coast as opposed to the more conventional formations
    in geology of the Permian Basin where we see a lot of EOR. So
    we're learning very much every day about enhanced oil recovery
    in the Gulf Coast and solving the challenges that we encounter
    in that geology. That's an important learning experience
    because if we can optimize and maximize oil recovery in new
    formations, then it opens up the fields of potentially other
    areas where CCUS can----
        Senator Manchin. Just one final comment on that.
        How much resistance do you all run into when you talk about
    carbon capture?
        Dr. Birol told us the two things that basically could help
    decarbonize and start helping the global climate would be nukes
    and CCUS. The two fastest, quickest, most cost-effective things
    we can do to decarbonize rather than just total elimination,
    which they are not going to do and we know that. But speaking
    in terms of reality, how much push back are you getting talking
    to your friends and colleagues that maybe have another point of
    view in this?
        Mr. Goff?
        Mr. Goff. So our experience on this is we haven't faced
    nearly any resistance but there isn't nearly enough focus. I
    think people are used to focusing on technologies that have
    been around for longer. Solar and wind are----
        Senator Manchin. I am talking about the concept of the new
    green deal and the reality of what it takes to be green.
        Mr. Goff. Yeah, so we, I think with NET Power specifically,
    are confident that we're going to get there with our, you know,
    friends on the environmental side of things that carbon capture
    is necessary, but that certainly remains to be seen.
        The Chairman. Thank you, Senator Manchin.
        Senator Daines, we have had a great conversation here
    today.
        Senator Daines. I can see that.
        Chair Murkowski, Ranking Member Manchin, thank you for
    holding this very important hearing. As a co-sponsor of the
    EFFECT Act, I want to thank the Ranking Member. Senator
    Manchin, I want to thank you for your leadership in this area
    and highlight the need for more investment in CCUS.
        I think we have a great opportunity, not just investing in
    clean technology but also in our communities and these good-
    paying jobs that coal power plants create, very important for
    Montana, for our country.
        As many in this Committee have heard me say before, the
    Colstrip Power Plant in Montana is one of the largest coal-
    powered plants west of the Mississippi and one of the largest
    economic drivers in Montana. A tremendous source of jobs, of
    reliable low-cost energy, importantly, part of our tax base in
    Montana that is critical.
        I believe that it shares a lot of similarities to the Petra
    Nova site and is thus uniquely situated for further investment
    and innovation. Of course, Montana has more recoverable coal
    than any state in the United States. Colstrip, like Petra Nova,
    is a large-scale coal plant that with a new pipeline can gain
    access to a nearby active oil field. We are out in the
    proximity of the Bakken. There is also strong support from the
    community and interest from stakeholders to utilize the carbon
    from Colstrip for EOR activities.
        Mr. Winberg, the EFFECT Act creates additional investment
    opportunities in the DOE for carbon capture programs and
    demonstrations that I discussed with DOE before in this
    Committee, and I believe Montana is a perfect location for more
    investment by the Department of Energy.
        My question is, do I have your commitment that DOE will
    work with me, with the Colstrip community and the owners to
    find opportunities for investment in Colstrip like those
    created in the bipartisan EFFECT Act?
        Mr. Winberg. Yes, sir, you do have the commitment. In fact,
    the Department of Energy, the Fossil Energy Office, has been
    working with the Colstrip owners and operators. We've done two
    studies to date. One of those studies was to evaluate ways to
    improve the efficiency of the Colstrip power plant and, of
    course, when you improve the efficiency, you reduce emissions.
    So that's key. And also, the second study that we did evaluated
    CCS opportunity for, as you say, enhanced oil recovery and I
    believe that was to a southeast Montana oil field.
        So yes, you have my commitment. We're happy to work with
    Colstrip to see what opportunities there are to keep the plant
    open, reduce its emissions and provide a value stream for
    enhanced oil recovery.
        Senator Daines. Thank you. I appreciate that.
        Mrs. Lagano and Mr. Jackson, you have both have gone
    through the process of finding and attracting investors and
    securing DOE commitments. What are some of the steps that you
    took to secure the investment by DOE and outside partners and
    how might we replicate that in Montana?
        Mrs. Lagano. Yes, I'd love to start. So thank you, Senator
    Daines.
        So in Petra Nova's case, the steps, the very important
    steps. First off, starting with authorizing the program. Then
    second, funding the program. Then competing for the funds and
    winning. And then, doing our homework, homework on the
    technology and the options. Then formulating strategic partners
    and those are partners that have vested interests similar to
    yours or maybe different than yours, but they must have a
    vested interest in the success of the project. And then,
    execution, so project execution because we know with funds
    comes a responsibility to spend those funds and stay within
    budget and keep within schedule. So those are very important
    steps. Each one has to be done with precision and has to be
    done in a way in which the goal is to turn the funds into a
    successful project on time and on budget.
        Senator Daines. Thank you, Mrs. Lagano.
        Mr. Jackson?
        Mr. Jackson. Yes, thank you for the question.
        I think, yeah, I'm going to build upon the partnership. I
    think the DOE, other industries, even our peers have been
    essential in putting together commercial projects to look at
    and move forward. So I think 45Q is a tremendous step that gave
    confidence to investors, because we deployed capital that's
    beyond our corporation. So that's been important. I think now
    it's putting these projects together. It's making it happen and
    put it together.
        We do think technology--and we appreciate the initial
    question--technology on reducing cost of capture is important
    and will help scale this.
        And again, as we've mentioned before, infrastructure.
        The last comment I'll make with respect to new and
    different areas for CCUS, one opportunity that we found moving
    into this over the last year and based on our long history in
    enhanced oil recovery, is technical partnership.
        So we actually, part of the team that I lead, opened a
    group that does just that, where there may be an industrial
    source that does not have the capability to look at the
    technology around capture or sequestration and we believe it is
    a good business but it's also helpful for global CCUS to
    promote that capability beyond ourself.
        Senator Daines. Thank you.
        And just one follow-up. Are there any obstacles that you
    encountered as you moved through this process? Perhaps lessons
    learned you might share for a plant that is interested in a
    similar investment and how might the EFFECT Act help achieve
    that goal?
        Mr. Jackson. I do think the technology cost needs to
    continue to come down. So that's a very important initial
    hurdle.
        I think the investability of a project, meaning well
    understood application of 45Q tax credits across a business
    structure as we put together these projects, will be critical.
        So as we bring more projects to the table, that will really
    enable this to happen.
        Senator Daines. Mrs. Lagano?
        Mrs. Lagano. Yes, and I think on the R&D front what we
    learn in our application, for example, in the first of a kind,
    large scale you would imagine you'd have to build in some
    margin into that design because of uncertainty, no one has done
    it before. We engineer it. We study it. But, you know, until it
    actually is put in service, then we see how it actually
    performs.
        Once we know that, then with the next generation, the next
    application, perhaps we can take some of that margin away and
    drive the cost down that way. You know, for example, the
    absorber which is a 300-foot tower. It's a vessel onsite. It's
    the largest vessel onsite. It's a very important piece of
    equipment because that's where the amine, you know, extracts
    the carbon from the flue gas. So if you could drive that cost
    down 10 percent, 20 percent, that's a very important
    advancement such that the learning from the experience that we
    had, we can reduce that cost going forward of the overall
    capital cost. That's very meaningful.
        Senator Daines. Right. Thank you.
        Chair Murkowski, Ranking Member Manchin, again, I want to
    thank you both for your leadership in this area and Senator
    Manchin, particularly, thank you for getting out in front of
    this issue.
        It is very important, I know, for your state, for my state
    and for this country. Thank you.
        The Chairman. Thank you, Senator Daines.
        Senator Manchin, I know you are running off to another
    committee, but if you would like to----
        Senator Manchin. What we are concerned about, Mrs. Lagano,
    is the 45Q tax.
        Mrs. Lagano. Yes.
        Senator Manchin. Okay, 45Q tax credit, do you qualify for
    that?
        We talked and you said there were some concerns you had. We
    had to make some adjustments for some--like Petra Nova is
    already out there and running.
        Mrs. Lagano. That's right.
        Senator Manchin. And you are not financially viable right
    now if it was not for the commitment you all have made. Another
    company might just walk away from Petra Nova.
        Mrs. Lagano. So, and we're encouraged----
        Senator Manchin. Financially, I mean.
        Mrs. Lagano. Yes, and as was mentioned on the panel earlier
    that there is a request for comments on how the 45Q tax credits
    can be implemented in a way that provides flexibility for
    operating projects such as Petra Nova and other projects for
    eligibility for and receipt of the credit and how that could be
    monetized. We are working with and providing comments on that,
    because it is important for us to access that.
        Senator Manchin. Well, the deadline is 2024.
        Mrs. Lagano. Yes, it is, right, Senator.
        Senator Manchin. And we know that is not--we are looking at
    extensions on that, and I think we have talked about the
    extension.
        But if you don't qualify and don't get the 45Q tax credits,
    will it put you all in jeopardy at the plant?
        Mrs. Lagano. Well, it's an important net part of the
    economics of the plant and we expect to be able to get that,
    but we need to straighten out some of these administrative
    issues such that we can access and receive the credits.
        Senator Manchin. And you all are working with our staffs?
        Mrs. Lagano. Yes, yes, with Treasury, the IRS and the EPA.
        The Chairman. Thank you. Thank you, Senator Manchin.
        Senator Hoeven.
        Senator Hoeven. Thank you, Madam Chairman.
        Secretary Winberg, in North Dakota we have Red Trail Energy
    which is an ethanol plant that wants to capture CO2
    and put it down a hole to make it. I think they are looking
    primarily just at storage, not tertiary oil recovery, but to
    have low carbon fuel for the West Coast. So that is an example
    of renewable energy that wants to utilize carbon capture. Then
    we have Project Tundra which is an existing coal-fired plant
    adding back-end capture on CO2. They want to put
    CO2 down a hole actually for tertiary oil recovery,
    and they are partnering with oil companies to do that. Then we
    have Allam Cycle which wants to build a new plant to do carbon
    capture. In all cases we have the State of North Dakota that is
    putting up money to do it.
        Well, let me start here. In each case we have the companies
    themselves and a consortium of companies putting up a lot of
    money to do this. They can do it technologically. We have to
    get the commercial viability. The companies themselves are
    putting up a lot of money and not even individually, actually
    grouping together to put up money. The State of North Dakota,
    through the Lignite Energy Council, is putting up money.
    Private sector partner, state partner. What partner is missing
    from that equation? If you guessed Federal Government, that is
    the right guess.
        So we need you in these projects. Tell me which funds and
    how you are going to invest in these projects so we can get
    going, because we have been talking about carbon capture
    forever.
        I would like to actually--and you talked about some
    projects that are going. It seems to me we have to do some
    more. How do we get that going now so we are not just talking
    about it this year, we are doing more of it?
        Mr. Winberg. We've had a longstanding relationship with,
    the Department of Energy, had a longstanding relationship with
    EERC.
        With respect to Red Trail Energy, we have a funding
    opportunity notice that we released April 1st of 2019. It's
    titled, Regional Initiative to Accelerate CCUS Development. We
    typically don't advise private entities on whether or not they
    should bid. This is a competitive----
        Senator Hoeven. Of course.
        Mr. Winberg. ----notice and so, certainly they could bid on
    this and I know that EERC has a working relationship with----
        Senator Hoeven. Now which funding, which one of the funds
    is that, Secretary?
        Mr. Winberg. It's called the Regional Initiative to
    Accelerate CCUS Development.
        Senator Hoeven. Great. And that is now open and again, an
    open, fair, transparent, competitive bid, that is what we want.
        Mr. Winberg. Yes, sir.
        Senator Hoeven. But I just want to know we are going to
    get, our guys are going to get, a shot at it. And that is
    available now?
        Mr. Winberg. It is available. It closes on June 3rd.
        Senator Hoeven. Fantastic.
        Now tell me about for the Project Tundra, the back-end
    capture and for a new plant. Which funds? Where are you at in
    the process for those?
        Mr. Winberg. There's a $30 million FOA that has closed now
    and so, we're in a procurement sensitive period. I think you
    could talk to John Harju about whether they submitted a
    proposal or not.
        Senator Hoeven. Right.
        Mr. Winberg. But so, there's that.
        And we've also been very active with EERC on CarbonSAFE as
    well as the PCOR Partnership. So it's a longstanding
    relationship with millions of dollars that have gone into the
    State of North Dakota.
        Senator Hoeven. Well, that is----
        Mr. Winberg. And mostly because the State of North Dakota
    has been a good partner with the Department of Energy.
        Senator Hoeven. Yes. Well, and that is the key.
        I just want to know that you are getting it going. It
    sounds like you are. I appreciate it.
        But you know, we have been talking, there has been a lot of
    talk about this and I just think we have to do a lot more
    ``do'' on it. I am very encouraged that you are getting these
    things going.
        John, are you--any thoughts in terms of how the process is?
    Is it moving along well now with DOE and the way it should be,
    and are we going to get to the ``do'' instead of just the talk?
        Mr. Harju. Yes, sir, I'm confident that we will.
        Senator Hoeven. Good, alright.
        Then the other question I have for you. Again, thank you,
    Secretary, I appreciate it.
        The other question I have for you is 48(a). We are trying
    to reconcile EPA regs and IRS regs when we put CO2
    down a hole for tertiary oil recovery, and we have had some
    challenges there. It is one thing to put CO2 down
    for geologic storage and we have the regulatory regime in North
    Dakota to do that, not only while they are doing it, but post,
    when they are no longer doing it. They pay into a trust fund
    and then the state, ultimately after ten years, takes
    responsibility. So that regime is there to handle geologic
    storage.
        But remember, we are trying to get to commercial viability
    so we can create a revenue stream that really helps these
    companies. To do that, they have to qualify on these wells, not
    only with EPA in terms of the geological storage of that
    CO2 as well as pushing the oil out, but then they
    also need to qualify for the tax credit with IRS and Treasury.
        Any thoughts, I mean, so that is legislation we are trying
    to move. I would think anybody interested in capturing
    CO2 would be all for it. But if somebody were
    interested in capturing CO2 but they really still
    were against fossil energy, they might not get on board. So any
    good advice on what we can do to reconcile those regulations
    either legislatively or through regulatory fiat so that these
    companies can capture that additional revenue stream?
        And if somebody else has a thought on that, I know I am a
    little past my time, with the indulgence of the Chair, if
    somebody else had a thought on that, I would sure appreciate it
    as well. I know Senator Gardner has immense patience, so he
    will be okay.
        Seriously, any help on that issue which, again, is very
    important when we are talking about trying to get to commercial
    viability. It is reducing costs, but it is also increasing
    revenue.
        Mr. Winberg. Right, and we've had some discussion about 45Q
    here. The IRS is working through the rules. The quicker that
    happens, of course, the quicker that a number of companies at
    this hearing can avail themselves of the 45Q tax credit.
        We've also had discussions about direct air capture. So if
    there is consideration about amending 45Q to allow smaller
    sizes for the direct air capture, that probably could be
    useful. I'm sure some of the panel members have other thoughts
    as well.
        Senator Hoeven. Any other thoughts on getting that in
    place?
        Dr. Friedmann. Yeah, two quick things.
        One of them to follow up Assistant Secretary Winberg's last
    comment. There's a new report put out by the Rhodium Group that
    proposes a set of discreet policy measures to support direct
    air capture deployment, including amendments to 45Q. They're
    very clear, very straightforward and easy to access.
        With respect to the question about how do we get more of
    this going, fundamentally? As I said earlier, really, I view
    this as a finance question as opposed to a cost question. And
    so, additional policies are valuable, and I made a handful of
    recommendations in my testimony.
        One thing that I think is important to recognize though,
    especially to those who stand opposed to deployment of carbon
    capture and storage, you have to build a partnership where
    monitoring is clear, robust and transparent. If the monitoring
    of CO2 storage is not clear, robust and transparent,
    people will have issues with that and will seek to disrupt
    projects.
        It has been our experience over the past 18 years that
    engaging communities, engaging stakeholders early, is essential
    to get there. There's, kind of, no substitute for that. And
    actually, EERC has been an exceptional example of the right way
    to go about doing that.
        And so, but I think that to recognize that if, especially,
    if you're going to be getting some kind of federal tax credit
    or something like that, if there's a public benefit that
    derives from this, then there needs to be representation of
    that to the public.
        Senator Hoeven. Right on, Doc. Well said. That is why we
    have invested incredible time and effort, in terms of both a
    legal and regulatory regime in our state, to do what you say so
    that it is accountable, not just at the company level, but
    people know the state is going to back it up, ultimately, so
    that it is done in an environmentally sound way. So I could not
    agree with you more.
        Anyone else? Yes?
        Mr. Harju. Senator, while you were out, I did take a moment
    to applaud your leadership as our Governor.
        Senator Hoeven. Wonderful, thank you.
        Mr. Harju. And putting forward those comprehensive--and
    signing them into law. But if you'll recall, you were actually
    a sponsor through the Industrial Commission of that
    comprehensive body of regulatory regime for geologic storage
    and a real champion of what turned into a long and onerous
    process of gaining primacy.
        Senator Hoeven. Yes.
        Mr. Harju. In particular, with respect to the 45Q program,
    I think there are extensions of time which Senator Manchin
    alluded to a little bit. I think there are also extensions
    regarding eligibility which Mrs. Lagano focused on a little
    bit.
        But also, on this notion of reporting requirements and how
    one certifies that storage, and I think where we're at today is
    it's a little bit clunky and we are pleased that IRS is seeking
    public comment there. But I would certainly hope that something
    like ISO or something like our comprehensive program in North
    Dakota would be an effective replacement for some of that more
    clunky regulatory oversight that we see today.
        Senator Hoeven. Thank you.
        Again, Madam Chairman, thank you for your indulgence. I
    know I went over my time, but I very much appreciate it.
        The Chairman. No, Senator Hoeven, this has been a very
    informative hearing and I think we have all gained a great
    deal.
        In fact, all of us have gone over our time, so it must mean
    that we are getting good information to the questions that we
    have asked. So I thank you for that.
        I wanted to just ask one more quick question to you, Mr.
    Harju.
        When we were talking about partnerships and all that you
    are doing there with Project Tundra, you mentioned the
    opportunity to expand the efforts that you are focused on with
    other partners and looking to Alaska. Would this be through the
    university or how do you structure that?
        Mr. Harju. Yes, thank you for the question, Senator
    Murkowski.
        So Secretary Winberg mentioned a regional initiative----
        The Chairman. Right.
        Mr. Harju. ----solicitation that is out right now.
        Thanks to Senator Hoeven's introduction to you and your
    introduction to some of your constituents, we're actively
    engaged in preparing a proposal that would broadly expand that
    nine state, four province region that we've been working on to
    include your state and what we see as some very interesting
    opportunities to not only build out this infrastructure and the
    approaches to doing CCUS projects but also to broadly increase
    that geologic or geographic footprint.
        Thank you.
        The Chairman. Well, I look forward to that.
        I think, again, there is so much that we can learn from one
    another. This regional approach, as you know, up North in
    Alaska, we have been utilizing EOR for our oil fields for
    decades now. And, you know, we feel that we have some good
    technologies in place there with the applications that we have,
    how we share that with others, and also how we can look to
    other utilizations. It was interesting to hear that we are not
    only looking at application, again, for purposes of enhanced
    oil recovery but you mentioned the prospects for cement and
    plastics and we are really thinking beyond today's application
    which, I think, is an important part of this discussion and
    just a reminder that this is all moving fast.
        While we might be a little frustrated that we are not
    seeing as much coming into commercialization as quickly as we
    would like because of the cost, because of the learning curve,
    learning these, the different applications in different areas.
    I think there can be a frustration and then you have colleagues
    like Senator King who are pointing to what we know our reality
    is with the levels of carbon that we are seeing and what do you
    do? What do you do?
        So there is a sense of urgency. We urge you to be more
    creative, more nimble, more malleable as you work to build out,
    what I think, are some very exciting opportunities for us.
        But as you are being creative, you also need to urge us to
    be responsive in what role and how the government can be a
    better partner in all of this.
        I think we recognize that we are not just there with a
    checkbook, but we are there to support levels of enhanced R&D.
    We are there to support financing opportunities through
    structures like the tax credits and like loan guarantees but
    also the whole necessity, because it truly is a necessity, for
    this partnering and not just partnering within the industry,
    not just partnering within this country, but partnering more
    broadly, more globally as we address what we know to be a
    global issue, a global problem.
        I thank you for what you have shared with the Committee.
    You have given us a lot to focus on as we think through our
    initiatives. So don't consider this input that you have
    provided today as just a one-off and then you go off and do
    your thing and you don't have any more back and forth with us.
    The whole purpose of this is that we can continue to learn from
    you.
        Thank you for your expertise, and thank you for sharing it
    with the Committee today.
        With that, we stand adjourned.
        [Whereupon, at 11:44 a.m. the hearing was adjourned.]

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